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Rational use, irrational pricing
Published in Al-Ahram Weekly on 23 - 12 - 2004

Despite the removal of government subsidies, water services in Middle Egypt are improving, writes Mahmoud Bakr
The Beni Sueif Drinking Water and Sewage Company (DWSC) has launched an awareness-raising campaign in the areas of Biba and Beni Sueif to rationalise water consumption, reduce wastage and ensure regular payment of utilities bills. The campaign is being supervised by Beni Sueif Governor Anas Gaafar, DWSC Chief Taha Shehata, and USAID's Deputy Director for Environmental Affairs Anthony N Vance. The effort is part of the Middle Egypt Utilities Institutional Strengthening Project for Minya, Beni Sueif, and Fayoum. Yet the driving force behind it is not purely to conserve resources: rather, it is the economic viability of the service itself which is at stake.
The improvements have not come cheap. According to Beni Sueif Governor Gaafar, LE1 billion has been spent over the past five years to implement drinking water and sewage projects. As a result, Gaafar claims, all illegal water connections have been eliminated throughout the areas covered. In return, the governorate is working to provide all homes with an official mains connection. This will mean paying for water, not just using it. Bills will be issued annually, though those who are unable to pay will have their fees waived, the costs being assumed by either the governorate or the local charity fund. In some neighbourhoods, the governorate has committed to cover half the cost of connecting homes to the water network.
When he spoke to Al-Ahram Weekly, the governor was in optimistic mood. By 2005, Gaafar says, there will be no more water problems in the governorate, and by 2006, sewage problems too will be a thing of the past. Out of 225 villages in Beni Sueif, he adds, only one is still outside the reach of the mains water network.
But there are problems still to be overcome -- chief among them, the public's attitude to water supply. Many people have never paid a water bill before. The interests of the DSWC are therefore balanced nicely between the need to ensure that inexperienced customers don't run up bills they have no hope of paying, and covering their own bills. Whence the dual logic behind the recent communications drive. "We hope the awareness campaign will help us recoup the cost of purifying the water," Shehata explains.
The DWSC is also working on quality issues, striving to ensure that water pressure is adequate even during peak consumption hours, and that water is available even in the most remote areas. "We also need to reduce pressure on the sewage network, to prevent pipes from bursting," Shehata points out. "We have a duty to protect this public asset."
Shehata admits that the company still faces problems, however. Of these, money is maybe the largest. The public pay only LE0.23 for a cubic metre of water (1,000 litres), which costs the company between LE0.7 and LE0.9 to produce. The price is set by the government, but the company no longer receives the state subsidies which used to make up the difference. Salvation in the short term can only come through volume, not price hikes. The DWSC currently produces about 70 million cubic metres of water per year, serving an area where per capita water consumption is about 120 litres per day. "We are trying to increase per capita consumption to 300 litres per day," says Shehata. This move will involve setting up seven self-funded water plants.
Leakage is also a major cost which had to be reduced if the economics of Middle Egyptian water were to be truly viable. Up until the end of 1999, the rate of water loss within the system due to leakage was running at up to 52 per cent. Now, Shehata says, this figure is down to 20 per cent, which is within the internationally acceptable range (15 to 20 per cent).
In 680 out of the 730 districts in the governorate, all houses now have a mains connection. The DWSC double-checks meters and bills when customers complain, and if the company is shown to have made an error, action is taken against the employees responsible.
Beni Sueif also has a lower minimum charge than many other governorates, equivalent to eight cubic metres per home per month. Unused residencies are charged a flat rate equivalent to four cubic metres per month, but the tenant or owner has to notify the company in advance that there is no one occupying the house. If a customer is unable to pay their bill in one go, instalment plans can be arranged. According to Shehata, these measures are intended to act as an incentive for people to think about how they can rationalise their water consumption. "We are trying to increase our revenues without hiking the price of our service," he explains.
Better services needs better infrastructure, which means large-scale investment. International support has played a key role in bringing about the improvements seen to date. Vance, USAID's deputy director for environmental affairs, says that institutional support for the water sector in the governorates of Minya, Beni Sueif, Alexandria, and Fayoum stands at $315 million, all of it in the form of a grant rather than loans. Most of the USAID support has been used to finance the construction of new plant. As of this writing, work is underway on new and upgraded installations at 30 sites across these four governorates.


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